It's not uncommon for companies to downplay features that its products don't have in comparison to its competitors. Companies will usually talk about how customers won't likely use the feature or how it's not cost-effective to implement such features at a certain price point. Microsoft has been on the defensive with its XBOX 360 for quite some time. The company has defended its lack of a built-in next generation DVD drive, it has downplayed the importance of HDMI with next generation games and now it is saying that 1080p doesn't really matter in the grand scheme of things.

Andre Vrignaud, Microsoft's Director of Technical Strategy for XBOX Live says that 1080p is mostly hype with the PlayStation 3. He goes on to say that 99% of the PS3 games released will be rendered at 720p while the only ones with 1080x native support will be arcade ports or games that sacrifice in-game effects. Here's a snippet from Vrignaud's Ozymandias Blog:

The PS3 has roughly the same pixel-pushing capabilities as the Xbox 360. Don't need to take my word for it, it'll be obvious soon enough over the next year. Even if this wasn't the case, consider we now live in a multi-platform development world, and that the current sweet spot developers are targeting is 720p due to the extremely similar system specifications. Simply put, a developer who is planning to release their game for both the Xbox 360 and the PS3 will aim for a common attainable ground. In fact, I'll stick my neck out and predict that that you won't see any 1080"x" games for the PS3 this year.

Vrignaud goes on to cite Home Theater Magazine'sGeoffrey Morrison as validation for his criticisms of 1080p on today's consoles. Since Vrgnaud notes that 99% of PS3 games will render at 720p, that leaves the argument for 1080p with movies. "In this case, the only difference between 1080i and 1080p is where the de-interlacing is done. If you send 1080i, the TV de-interlaces it to 1080p. If you send your TV the 1080p signal, the player is de-interlacing the signal. As long as your TV is de-interlacing the 1080i correctly, then there is no difference," said Morrison.

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MPEG4 will not make 1080p magically viable for broadcasting. Since even in MPEG4 1080p consumes a massive amount of bandwidth and TBH if i had a choice of 100 720p channels or 10 1080p channels, i'd take the 100 720p channels thanks.

You also have to remember that the amount of channels you can shove down any wire/signal (for digital satellite) is finite and providing 1080p would cut the amount of channels that could be transmitted drastically.

It is twice as much data means 1/2 the number of channels, not 1/10. So your choice is between 30 720p/1080i channels (of which you might want to watch 0-8) and 15 1080p channels. Of course even that isn't acurate, as many will upgrade to 720p/1080i and not worry about that last step to 1080p.